A topic to get things moving: Flat Tax

weezie825 · September 2011

On the radio this morning they were talking about Herman Cain's Flat Tax proposal... so here is a little poll to get things moving.

1. Do you support a flat tax? (Where everyone pays the same rate and there are NO deductions, including no mortgate interest or child deductions.)

2. Regardless if you agree with it or not, do you think it has any possibility of passing?

xmaryrickx · September 2011

I agree with it. I think the deductions are ridiculous. When someone makes 9k in a year and gets 7k back in taxes, yeah something isn't making sense. And on the opposite end of that spectrum, the super wealthy who are able to set up tax shelters, and not have to pay taxes on the money they earn on investments over a certain amount (isn't it really low, like 15k). There are just too many loopholes and exemptions as it is.

weezie825 · September 2011

1. No. I do not support a flat tax. I believe that it is right for people to earn more to pay a bit more. I am not saying I necessarily agree or disagree with the current marginal rates, only that I agree in princple to a progressive tax.

2. I don't think it has any shot in He|| of passing. People like the premise of "simplifying the tax code" but the truth is that there is a whole industry that has grown up around helping people navigate the tax system. If we moved to a straight x% of income tax with NO deductions all the people who work for H&R Block, Jackson Hewitt and the like will be out of a job. Also, hundreds of thousands of IRS workers would no longer be needed.

So, I think it is a good sound bite, but I don't believe it will ever happen. I don't think memebrs of Congress would be able to stomache the massive amount of jobs and business that would close down in their districts if this actually happened. Just look at how members of Congress got involved when GM was trying to close 1 or 2 dealerships in their distrticts...

weezie825 · September 2011

xmaryrickx:
I agree with it. I think the deductions are ridiculous. When someone makes 9k in a year and gets 7k back in taxes, yeah something isn't making sense. And on the opposite end of that spectrum, the super wealthy who are able to set up tax shelters, and not have to pay taxes on the money they earn on investments over a certain amount (isn't it really low, like 15k). There are just too many loopholes and exemptions as it is.

I do agree with you about the deductions...

mrs. remy · September 2011

I agree with it on paper. IMO I find it fundamentally wrong that certain people should have to pay more in percentage of taxes just because they make more money. I also think its kind of appalling that like 47% of the population or whatever it is ends up paying no income tax (don't quote me on that. I don't remember the exact stat). And yes, I know they pay sales tax etc....big whoop. When we are facing the problems our country is now with spiraling debt I just think everyone should be paying their fair share and stop complaining about taxes. I mean FFS our taxes are ridiculously low compared to other industrialized countries and compared to what we have been taxed in past decades.

In terms of logistics, I don't see it really working out. The capital gains question is a big one-would we be addressing that too? And I am biased but I don't want the mortgage deductions to end. I think by doing that you take away a huge motivator for home ownership. I just don't see it passing.

wawajeanne · September 2011

I go back and forth on this.

I think the tax code could stand to be simplified. I think a lot of our tax breaks are a bad idea (I'll take the mortgage interest deduction for as long as it exists, but I don't think it should have ever been created.)

But...should we be taking the same percentage of income from somebody who grosses 30K as somebody who grosses 300k or 3M? I'm not sure.

Obviously people in the higher brackets can generally afford to pay a higher percentage without feeling much pain...but does mean they should have to? Particularly with the crapass job our gov't does spending that money? Yeah...not sure.

weezie825 · September 2011

I think if they are going to phase out certain deductions they need to do it over a very long time horizon... For example, if they are going to get rid of the mortgage deduction it should be phased out over 30 years. (Since most people have 30 year mortgages.) Same with the deduction for children, if they phase it out it should be phased out over 18 or 20 years.

The only thing keeping us in our house right now is the mortgage deduction. If it were not for that I would totally unload it and rent. In my experience home ownership has been completely overrated.

idonthavethis · September 2011

I agree with it. As a side note, I love Herman Cain.

Ragdolls · September 2011

I support it for reasons nearly identical to Mary's - though I don't think it has a shot in hell of passing, if for no other reason than the pull of the industry that's grown around our current system - not to mention how "easy" it is to demonize the idea to the masses.

wawajeanne:

Obviously people in the higher brackets can generally afford to pay a higher percentage without feeling much pain.

Is this really that obvious? Not to sound like a PITA sound bite on a loop, but my income supports every ounce of what my family does - our mortgage, DH's tuition, all of our expenses for DS, insurance policies, gas, medical.... Based on our current tax bracket I work the equivalent of January 1 through early June for income taxes alone. That f'ing HURTS. Just because the super-rich have the tools to get around these rates with a million loopholes doesn't mean that everyone in a higher tax bracket does. At all.

idonthavethis · September 2011

Ragdolls:

I support it for reasons nearly identical to Mary's - though I don't think it has a shot in hell of passing, if for no other reason than the pull of the industry that's grown around our current system - not to mention how "easy" it is to demonize the idea to the masses.

wawajeanne:

Obviously people in the higher brackets can generally afford to pay a higher percentage without feeling much pain.

Is this really that obvious? Not to sound like a PITA sound bite on a loop, but my income supports every ounce of what my family does - our mortgage, DH's tuition, all of our expenses for DS, insurance policies, gas, medical.... Based on our current tax bracket I work the equivalent of January 1 through early June for income taxes alone. That f'ing HURTS. Just because the super-rich have the tools to get around these rates with a million loopholes doesn't mean that everyone in a higher tax bracket does. At all.

And why should you have to pay so much more in taxes. You worked your *ss off to get where you are, why should you be penalized for it? It makes me mad. It all benefits the poor and exploits the rich.

lenebene · September 2011

Ragdolls:
A sound bite on a loop, but my income supports every ounce of what my family does - our mortgage, DH's tuition, all of our expenses for DS, insurance policies, gas, medical.... Based on our current tax bracket I work the equivalent of January 1 through early June for income taxes alone. That f'ing HURTS. Just because the super-rich have the tools to get around these rates with a million loopholes doesn't mean that everyone in a higher tax bracket does. At all.

We are in the same boat and it sucks!

I don't see the flat tax ever flying... there are too many programs and people that depend on all the deductions that have been setup. The tax system needs a complete overhaul to get rid of the loopholes, etc but I don't see that happening anytime soon. It would take a TON of people and a TON of money to make it happen and I don't 'feel the flat tax would solve the problems we have. It might help but not enough....

KathrynMD · September 2011

what about people who don't pay income taxes, but instead make money from capital gains and other investment income or consultants who get a 1099s.

I think "flat tax" sounds like an easy solution to an fucked up tax system. We need a better tax system, but not a flat tax.

KathrynMD · September 2011

weezie825:

2. I don't think it has any shot in He|| of passing. People like the premise of "simplifying the tax code" but the truth is that there is a whole industry that has grown up around helping people navigate the tax system. If we moved to a straight x% of income tax with NO deductions all the people who work for H&R Block, Jackson Hewitt and the like will be out of a job. Also, hundreds of thousands of IRS workers would no longer be needed.

honestly, that's just scratching the surface. their are corporate tax departments at every law firm in this country helping very wealthy people find loopholes in the tax law to keep more of their money. And, all the banks and private investment firms too.

lenebene · September 2011

KathrynMD:
what about people who don't pay income taxes, but instead make money from capital gains and other investment income or consultants who get a 1099s.

I think "flat tax" sounds like an easy solution to an fucked up tax system. We need a better tax system, but not a flat tax.

A consultant who is 1099, is suppose to pay taxes. Usually its quarterly.

KathrynMD · September 2011

yes, but they dont' get taxes withheld or pay that tax as income

wawajeanne · September 2011

Ragdolls:

I support it for reasons nearly identical to Mary's - though I don't think it has a shot in hell of passing, if for no other reason than the pull of the industry that's grown around our current system - not to mention how "easy" it is to demonize the idea to the masses.

wawajeanne:

Obviously people in the higher brackets can generally afford to pay a higher percentage without feeling much pain.

Is this really that obvious? Not to sound like a PITA sound bite on a loop, but my income supports every ounce of what my family does - our mortgage, DH's tuition, all of our expenses for DS, insurance policies, gas, medical.... Based on our current tax bracket I work the equivalent of January 1 through early June for income taxes alone. That f'ing HURTS. Just because the super-rich have the tools to get around these rates with a million loopholes doesn't mean that everyone in a higher tax bracket does. At all.

Come on, there is a difference between "My income goes to essentialls" and "there is NO ROOM in my budget to reduce our expenses". Somebody who makes a lot less than you do won't have the same expenses you do - your lifestyle grows to fit your budget. I know that you aren't wiping you ass with $20's here, but you live in a big nice house in a lovely area, you drive a nice car, etc etc. If you had less money...well, you'd have a smaller mortgage and crappier car. You'd spend less on eating out and eat more beans and oatmeal. You'd buy cheaper clothes. You'd find the the room. Somebody who makes a fraction of what you makes has less room to cut - there is a limit on how little you can spend on the essentials and you are a fair ways above it. As am I. It's not a judgement on your budgeting skills or your lifestyle - it's just a fact. You could survive on say...40% of your income. Somebody who only makes 30K gross would be SOL on 12k. That would just barely cover rent in this part of the country, and then you add in food, clothes, transportation and medical expenses and things are looking awfully bad.

But as I said before, just because you could manage to pay more doesn't mean you should have to. I agree that it's not fair for the gov't to keep taking from you just because they can do so without leaving you destitute.

I'm just not sure that a flat tax is the answer to that.

lenebene · September 2011

KathrynMD:
yes, but they dont' get taxes withheld or pay that tax as income

You are correct that they don't get them withheld but when they do pay them, they are suppose to be income. I was a 1099 for a couple of years, so I did pay estimated taxes quarterly based on my income. I know you don't have to pay quarterly and you can pay at the end of the year based on the income you report. I'm sure there are a ton of loop holes though.

Ragdolls · September 2011

wawajeanne:
Ragdolls:

I support it for reasons nearly identical to Mary's - though I don't think it has a shot in hell of passing, if for no other reason than the pull of the industry that's grown around our current system - not to mention how "easy" it is to demonize the idea to the masses.

wawajeanne:

Obviously people in the higher brackets can generally afford to pay a higher percentage without feeling much pain.

Is this really that obvious? Not to sound like a PITA sound bite on a loop, but my income supports every ounce of what my family does - our mortgage, DH's tuition, all of our expenses for DS, insurance policies, gas, medical.... Based on our current tax bracket I work the equivalent of January 1 through early June for income taxes alone. That f'ing HURTS. Just because the super-rich have the tools to get around these rates with a million loopholes doesn't mean that everyone in a higher tax bracket does. At all.

Come on, there is a difference between "My income goes to essentialls" and "there is NO ROOM in my budget to reduce our expenses". Somebody who makes a lot less than you do won't have the same expenses you do - your lifestyle grows to fit your budget. I know that you aren't wiping you ass with $20's here, but you live in a big nice house in a lovely area, you drive a nice car, etc etc. If you had less money...well, you'd have a smaller mortgage and crappier car. You'd spend less on eating out and eat more beans and oatmeal. You'd buy cheaper clothes. You'd find the the room. Somebody who makes a fraction of what you makes has less room to cut - there is a limit on how little you can spend on the essentials and you are a fair ways above it. As am I. It's not a judgement on your budgeting skills or your lifestyle - it's just a fact. You could survive on say...40% of your income. Somebody who only makes 30K gross would be SOL on 12k. That would just barely cover rent in this part of the country, and then you add in food, clothes, transportation and medical expenses and things are looking awfully bad.

But as I said before, just because you could manage to pay more doesn't mean you should have to. I agree that it's not fair for the gov't to keep taking from you just because they can do so without leaving you destitute.

I'm just not sure that a flat tax is the answer to that.

I need to cool off before I respond to this. I'm also swamped with work while my parents are home watching my kid since I don't have the money for the live in nanny I'd otherwise need to take care of my child while I'm working 12-20 hours a day.

In the meantime - yes - you're absolutely right. I'm not scraping together money to feed my family and ::gasp:: I don't always buy the cheapest thing available when I do things, like renovate my home, that are important to me. I have that option because I planned and worked my a$$ off. And you know what? If my taxes were much higher - or I had a preview into what income would *really* be going in my pocket when the time came, I very well might have made some different choices back in my early twenties. We need a system that motivates people to work hard and the current one leaves something to be desired in that department.

Matildasun · September 2011

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.

Oh those lucky, lucky poor people.

Really?

Ragdolls · September 2011

matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

To be clear, I don't subscribe to this tagline at all. The current system is FUBARed from all angles and needs a complete overhaul.

KathrynMD · September 2011

matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

stupid food stamps and WIC!!

idonthavethis · September 2011

matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

Everyone should have to pay taxes. Instead of *gasp* cutting any programs, the fingers always go to the rich (I hate to even use the word rich) to cover everything. Most of the rich people worked to get where they are, so why are they being treated as if they have done something wrong? That's just my opinion.

Matildasun · September 2011

Rags, I didn't mean to implicate you in my statement. I was really only responding to the exact line I quoted and not the larger issues in the thread.

mrs. remy · September 2011

finally, people are speaking their true opinions....where is lsgarver??

idonthavethis · September 2011

matildasun:
Rags, I didn't mean to implicate you in my statement. I was really only responding to the exact line I quoted and not the larger issues in the thread.

Also @ Rags, I didn't mean to make it sound like you agreed with what I was saying. I'm sorry if it come off that way. I am probably the only one who feels this way on here.

idonthavethis · September 2011

KathrynMD:
matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

stupid food stamps and WIC!!

I appreciate the sarcasm.

Ragdolls · September 2011

matildasun:
Rags, I didn't mean to implicate you in my statement. I was really only responding to the exact line I quoted and not the larger issues in the thread.

It's cool - if nothing else, thinking of myself as "rich" as I sit here in my Tar-jay outfit snarfing dried fruit from Trader Joe's for lunch while I review these disclosure schedules is sort of giggle-inducing.

Matildasun · September 2011

idonthavethis:
matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

Everyone should have to pay taxes. Instead of *gasp* cutting any programs, the fingers always go to the rich (I hate to even use the word rich) to cover everything. Most of the rich people worked to get where they are, so why are they being treated as if they have done something wrong? That's just my opinion.

Many poor people also work hard.

edited to add--Idon'thavethis, you are certainly entitled to your opinion. I just don't agree with it, but it does make for good conversation, I am sorry I am not contributing more. I am rocking a sick toddler and it is hard to type.

SarahKate31 · September 2011

In general, it seems "fair" that we all pay the same percentage, no matter our income. I don't think that people who make more should have to pay more just because they (most likely) can afford it. And I agree with a lot of what Wawa said about lifestyles expanding to fill out your budget. That is certainly true for me.

However, I don't think there's a quick fix for the taxes. I actually don't think they'll ever be able to uncomplicate them. Even if we instituted a flat tax, there would always be "exceptions" or "bonuses" or "exemptions" or SOMETHING to eff it up again.

And, not related, but I noticed TN is not censoring the profanity in this thread.

idonthavethis · September 2011

matildasun:
idonthavethis:
matildasun:

idonthavethis:
It makes me mad. It all benefits the poor and exploits the rich.
Oh those lucky, lucky poor people.
Really?

Everyone should have to pay taxes. Instead of *gasp* cutting any programs, the fingers always go to the rich (I hate to even use the word rich) to cover everything. Most of the rich people worked to get where they are, so why are they being treated as if they have done something wrong? That's just my opinion.

Many poor people also work hard.

I never said they didn't.

SarahKate31 · September 2011

Ragdolls:
matildasun:
Rags, I didn't mean to implicate you in my statement. I was really only responding to the exact line I quoted and not the larger issues in the thread.

It's cool - if nothing else, thinking of myself as "rich" as I sit here in my Tar-jay outfit snarfing dried fruit from Trader Joe's for lunch while I review these disclosure schedules is sort of giggle-inducing.

This is why I hate the word "rich". It completely depends on your perspective. What do you need to be "rich"? Do you have to make a ton of money, or just have nice things? And what about a nice house, but average clothes? Or nice cars, but an average house? Or what about just owning a house in general? All of the above are considered "rich" by someone.

A topic to get things moving: Flat Tax

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